Correlation Between Guidepath(r) Managed and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Old Westbury at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guidepath(r) Managed and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and Old Westbury Fixed, you can compare the effects of market volatilities on Guidepath(r) Managed and Old Westbury and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guidepath(r) Managed with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Old Westbury.
Diversification Opportunities for Guidepath(r) Managed and Old Westbury
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidepath(r) and Old is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed and Guidepath(r) Managed is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guidepath Managed Futures are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Old Westbury go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Old Westbury
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Old Westbury. In addition to that, Guidepath(r) Managed is 3.09 times more volatile than Old Westbury Fixed. It trades about -0.05 of its total potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.04 per unit of volatility. If you would invest 949.00 in Old Westbury Fixed on August 24, 2024 and sell it today you would earn a total of 59.00 from holding Old Westbury Fixed or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Old Westbury Fixed
Performance |
| Timeline |
| Guidepath Managed Futures |
| Old Westbury Fixed |
Guidepath(r) Managed and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Old Westbury
The main advantage of trading using opposite Guidepath(r) Managed and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Old Westbury can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Old Westbury will offset losses from the drop in Old Westbury's long position.| Guidepath(r) Managed vs. Aqr Managed Futures | Guidepath(r) Managed vs. Pimco Trends Managed | Guidepath(r) Managed vs. Pimco Trends Managed | Guidepath(r) Managed vs. American Beacon Ahl |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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